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It’s no secret that health care in the United States is too expensive and not cost-effective. Most of the attention to health care reform has gone to those who lack employee health care, but half of Americans get health care through their employers. Their care is also too expensive—employer health care costs rose 191% between 1999 and 2016, compared to 44% non-healthcare inflation. Many employers want to find ways to make it less expensive, and also to improve the quality of care and health of employees.

In pursuit of these objectives, fifty large companies—from American Express to Weyerhauser—joined together in 2016 to create the Health Transformation Alliance (HTA). Together they comprise over seven million covered lives. The core of the alliance is technology, data, and analytics; companies who are members agree to share data and solutions with each other. There are, of course, other such alliances—the one between Amazon, JPMorgan Chase, and Berkshire Hathaway has received substantial attention —but HTA is much larger and further along, and both JPMorgan Chase and one Berkshire Hathaway business unit are also members of HTA.

What HTA Offers

The solutions that HTA offers its members are primarily in three areas, each of which has data and analytics at its foundation:

Pharmacy products—HTA offers a pharmacy benefit management (PBM) solution that members can choose to buy into. HTA has a partnership with Optum Rx and CVS Caremark to offer the PBM services. Some HTA members find them superior to what is offered to individual companies.

Medical networks—HTA negotiates master services agreements (MSAs) with large medical systems. This offering started with a small number of geographies, and now has expanding to more. These relationships go through existing payers and third- party administrators (TPAs).

Consumer engagement—HTA is also working on and partnering for offerings that improve consumer engagement in their own healthcare. The cooperative helps employers determine which point solutions are better than others, e.g., for addressing diabetes. HTA is partnering with Welltok, an AI-based startup in the engagement space.

In terms of the specific health problems it focuses on, HTA has prioritized the most expensive and dangerous conditions for its members’ employees—diabetes, opioids, heart disease, and drug utilization.

HTA and IBM

A key focus of HTA’s early years has been to integrate data across member companies and begin to analyze it. IBM is one of the members of HTA, and its IBM Watson Health division is a vendor/solution provider for the cooperative’s technology plans. Specifically, IBM’s Watson Health business unit provides data warehousing solution in which members’ medical, pharmacy, eligibility, and other types of data, are combined and stored. IBM Watson Health also makes reporting and analytics available; members can get insights on their own deidentified employee data, and they can also see selected aggregated information on other members’ employee’s health conditions and payer claims. Watson Health also provides advanced analytics capabilities including AI to HTA. Many of the capabilities used by HTA came to IBM from its acquisition of Truven Health Analytics in 2016.

Shirish Dant, HTA’s General Manager for Data Solutions, manages the IBM relationship and says that an early focus is on integrating the data and amassing a critical mass to support high granularity data analytics. 70% of members are already on the common data platform. There is also a fair amount of analytical activity underway to understand quality and price variations across health care providers, efficacy of drugs, changes in utilization patterns and health outcomes, and to provide HTA members insights to shape employee health benefits. The cooperative is also getting started on AI applications, primarily in the area of machine learning to identify emerging cost drivers or to understand traits of employees likely to acquire certain disease conditions. When HTA and IBM discover a particular pattern in the data, they have the ability send out alerts through a member portal.

Given the range of HTA’s offerings, the cooperative is beginning to offer some integrated solutions to help members and their employees. If, for example, a member company has diabetes as a major problem, through Welltok the member company can deploy different types of behavior change methods for different types of individuals. The health engagement approaches can also utilize the communications channels that are most likely to be effective. If there is a gap in care for particular employees, HTA can identify it and alert the member company.

HTA Members Speak

We spoke with two of HTA’s earliest and most committed members at Lincoln Financial Group and The Hartford. Both were enthusiastic about their membership in the alliance, and both feel they are already getting results despite HTA still being in its early days. George Murphy is the Senior Vice President of Total Rewards, HR Technology and Operations at Lincoln Financial Group, and is heavily involved with HTA on the data side. He said that in part as a result of what they have gained from HTA, Lincoln is in the bottom 25th percentile in employer health cost increases, and the company had no increase at all two years ago. Marty Gervasi, Chief Human Resources Officer at The Hartford, and strategy lead for healthcare transformation through HTA’s data solutions, also said that her company had frozen employee health care contributions in 2018 for first time in many years, and had lowered them for the vast majority of employees in 2019. Some of these benefits result from the ability to do large group purchasing of health insurance, pharmacy benefits, and other health services through HTA.

But both executives also said that the data and analytics from HTA were of increasing value as well. They mentioned that with the increased number of lives covered by the HTA collaboration, they can compare small groups of their employees in particular geographical areas to larger populations. As Gervasi notes, “We can find out if we are a good or bad outlier on particular conditions.”

Both said that moving their data into the HTA warehouse was pretty straightforward—particularly so for Lincoln, which had already been working with Truven before IBM acquired them. Both company representatives said that they are already getting value from the data and analytics HTA provides, even though it took a while for the alliance to assemble member data into a common repository.

The two companies are beginning to use data and analytics from HTA to shape their employee benefit options. Gervasi noted:

We are using the HTA data for better, more precise segmentation of employee and employer shares of costs. Having the data is a big deal for us as opposed to relying on third party administrators (TPAs). The HTA data creates more of a level playing field with the TPAs; we can rely less on their analyses and more on our own insights into the data. We are also rolling out a new consumer engagement tool with Welltok that will deliver personal recommendations for employees; we’re very excited about it.

Murphy said that Lincoln Financial is using the data and IBM’s Watson capabilities to understand emerging cost drivers, particularly from high-cost drugs that don’t provide much additional value to employees. They use an artificial intelligence based product feature in Watson called “Change Detection” to identify patterns in the data that may have escaped normal review. Murphy also noted that being able to identify providers that provide care at reasonable cost in a particular geography leads to both higher quality and more complex benefit designs that wouldn’t have been possible without the HTA data.

Using data and analytics to achieve any business objective has long been a single company’s problem. But collaborating across companies in non-competitive areas like employee health can provide substantial advantages: sharing of technology, creating a critical mass of data, collaboration in using the data effectively, and sharing of best practices. The Health Transformation Alliance may be an early example of a “data club” that will be broadly applied within other business contexts.

Randy Bean is an industry thought-leader and author, and CEO of NewVantage Partners, a strategic advisory and management consulting firm which he founded in 2001. He is a contributor to Forbes, Harvard Business Review, MIT Sloan Management Review, and The Wall Street Journal. You can follow him at @RandyBeanNVP.

I'm the President's Distinguished Professor of IT and Management of Babson College, a Digital Fellow at the MIT Initiative on the Digital Economy, and a Senior Advisor to

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I'm the President's Distinguished Professor of IT and Management of Babson College, a Digital Fellow at the MIT Initiative on the Digital Economy, and a Senior Advisor to Deloitte's Analytics and Cognitive practice. I've been a professor at several universities (Harvard, University of Chicago, University of Texas) and a consultant or partner at several leading consulting firms (McKinsey, EY, Accenture). I teach, research, write, and speak about the impacts of information technology on people and organizations. My specific enthusiasms over the years have included business process reengineering, ERP, knowledge management, analytics, and AI. I've had many thoughts about these topics, and I've published most of them.